The average annual gross rental yield for single-family properties the first quarter of 2018 was 8.9%, down from 9.2% a year earlier.
An analysis of data from 449 US counties by ATTOM Data Solutions reveals that despite the lower returns, small to mid-tier investors helped boost activity in the market.
"The biggest increase in market share over the past year has come among investors owning six to 10 single family rentals, followed by those owning between 11 and 100 rentals,” said Daren Blomquist, senior vice president at ATTOM Data Solutions.
He explained that newfound efficiencies in acquisition, financing, and property management, have helped these investors buy properties in areas with higher potential returns. The additional yield has then enabled more properties to be purchased.
Highest returns are in these counties
Counties with the highest potential annual gross rental yields for 2018 were Baltimore City, Maryland (28.6%); Bibb County, Georgia in the Macon metro area (21.8%); Montgomery County, Alabama, in the Montgomery metro area (21.7% percent); Wayne County, Michigan in the Detroit metro area (21.7%); and Clayton County, Georgia in the Atlanta metro area (20.3%).
A third of counties experienced a year-over-year rise in rental returns led by Rowan County, North Carolina in the Charlotte metro area (up 36%).
Counties with the lowest potential annual gross rental yields for 2018 were Arlington, Virginia, in the Washington, DC metro area (3.6%).
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